Online analytical processing (OLAP) is a category of software tools that provides an analysis of data stored in a database. OLAP tools enable users to analyze different dimensions of multidimensional data.
For example, it provides a time series and trend analysis views. The chief component of OLAP is the OLAP server, which sits between a client and a database management system (DBMS), and which understands how data is organized in the database and has special functions for analyzing the data.
There are OLAP servers available for nearly all the major database systems.
It is more important to know about the OLAP cube. The OLAP cube is a data structure that allows you to analyze data very quickly. In the OLAP cube, numeric facts (measures) are categorized by dimensions. OLAP holds multidimensional data. The OLAP cube helps to store and analyze this multidimensional data.
Advantages of Online Analytical Processing
- Helps to get all the data together to create accurate and quick information about the business.
- Helps to analyze the time series
- Provides platform for all type of business including planning, budgeting, forecasting, financial reporting, data warehouse reporting
- Allows users to do compatible calculations
- Allows users to divide big cube into dice cube data by several dimensions, measures, and filters
- Helps the end-users to analyze data in multiple dimensions so that they make better decisions in business
Disadvantages of Online Analytical Processing
- It is difficult to have a large number of dimensions in a single OLPA cube
- Snowflake schema required for organizing data is complex to implement
- Modification of an OLAP cube requires a full update of the cube that consumes more time
Get more definitions about online analytical processing (OLAP) and other ERP related terms here.